Wednesday 23 February 2005 19.02 EST
First published on Wednesday 23 February 2005 19.02 EST

New mobile phones tend to get most of the attention at 3GSM, the mobile industry's annual conference in Cannes, along with new music and video services that network operators hope will make as much money as SMS. But as T-Mobile's chief executive, Rene Obermann, pointed out, it was business users who first paid real money for mobile phones and they may be the most profitable market in the future, too.

With business spending on mobile technology set to increase by 25% rather than 2.5%, according to a survey conducted for O2, there should be plenty of money to go around.

More than 70% of businesses in the O2 survey already have some access to mobile email, and the next step is to give workers access to other company systems when they are on the move. Companies also want to get more workers connected - only 25% have the majority of workers able to read email on the move.

That makes two of the show's most unexpected announcements - the agreements between Nokia and Microsoft - among the most interesting. Most have focused on whether putting Windows Media files on Nokia phones will rival the iPod - or Motorola's iTunes phone, which was shown in Cannes. But for businesses, Nokia's plan to use Microsoft's Exchange Server ActiveSync technology to synchronise email, contacts and appointments onto future Series 60 and Series 80 phones is far more important.

Being able to see new emails, changes to your diary and other data on your phone is what has made Windows Mobile smartphones particularly interesting for business users. (Operators also like them because users typically spend more money on services and bandwidth.) Similar features have driven the huge popularity of BlackBerry devices - more than 40% of businesses in the O2 survey are planning to adopt BlackBerry.

The advantage of the ActiveSync option is that companies don't need to add software or hardware to their Exchange email servers. Also, they don't need to replicate email onto a less secure third-party system, or open up their firewalls to allow email through. It's an advantage that PalmOne spotted last year when it also signed a deal with Microsoft, and the end result will be that Nokias, Windows Mobile smartphones and PalmOne Treos will all offer the same email synchronisation.

Signing up with Microsoft's enterprise system also suggests Nokia plans to concentrate on handsets and phone features, rather than on its own enterprise integration solutions, to make Nokia phones more valuable to businesses.

The industry is still experimenting with what makes a good business mobile. Is it adding a touchscreen or a Qwerty keyboard so you can type more than yes or no, but still ending up with something that feels like a mobile phone?

Often manufacturers try to appeal to consumers by including features such as cameras, which businesses don't want to pay for and may see as a distraction or a security risk. However, HP is planning to offer customised versions of its iPaq hw6500 Mobile Messenger phone, which it pre-announced at the show, with or without a camera as customers and operators prefer.

HP's Mobile Messenger has built-in GPS, along with software that triangulates phone signal strength to figure out where you are if you can't get a GPS signal. T-Mobile is also planning to offer GPS as an option on all its UK smartphones.

The demand for GPS has surprised manufacturers. According to David Quin of ALK - who was showing off the Windows Mobile smartphone version of the CoPilot route-finding software by using it to dodge traffic jams in Cannes - most businesses want it for more than tracking employees in real time; they want to check back at a later date and see if people were where they were supposed to be.

Building in more features puts up manufacturing costs, and the subsidies on many phones means it is not the buyers who are paying for it. This may be behind Obermann's call to drop subsidies on phones, and reduce roaming rates and bandwidth charges instead. T-Mobile is switching to flat fees, which it says make US phone usage twice as high as for UK users. Large businesses are often on flat-fee tariffs already, but smaller businesses could save money with a T-Mobile deal.

Obermann also wants to make phones and services simpler, so customers use them more often. However, most operators are talking about introducing more new services and personalising them, so you can pick and choose the ones you need.

Developing new services is a problem because of the complexity of the systems inside mobile networks - everything has to be written from scratch to work with the operational and billing systems. So companies such as IBM, HP, Microsoft, Unisys and, most recently, BEA have been developing service delivery platforms that use emerging phone equipment standards like Parlay to let developers write services without worrying about how the equipment does what they need it to do.

BEA's new Da Vinci software gives Java developers access to network services such as SMS alongside more familiar tools like JSP, and it uses Web Services to link to back-end systems. Microsoft also launched a new version of its Connected Services Framework in Cannes. This lets developers combine services from different providers, so they don't need a detailed understanding of the billing systems of three different network operators to build a service that works with all of them.

But convergence between voice and data seems, as always, to be just around the corner. While phone manufacturers like i-mate and Motorola announced partnership deals with Skype, the peer-to-peer VoIP operator, all that users will see is that their new PDA phones come with Skype software pre-installed. They'll still need to switch from standard GSM to Wi-Fi if they want to use Skype for calls. There is no seamless roaming from narrowband to broadband data, and you don't even get a combined address book.

Another idea is to skip the integration and use your mobile phone like a fax machine. Realeyes3D has already produced software for sending handwritten messages from a phone - now you can snap a purchase order or a map with a camera phone and send it to a fax machine or email inbox. It arrives as a picture rather than a document, but it's a quick way of sending data. It is the kind of sticking plaster solution that better standards and better development tools should make unnecessary.

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